Appraisal myths & facts

It is enforced by the government that an appraiser must be state-licensed to create appraisals for federally-supported property transactions in California. Also by law, you are allowed to receive a copy of the completed appraisal report from your lender. Contact Epic Appraisals, LLC if you have any concerns about the appraisal procedure.

Myth: Assessed value will always be similar to to market value.

Fact: It could be that California, like most states, validates the suggestion that the assessed value is the same as the market value; however, this is not always true. Interior reconstruction that the assessor is unaware of and a dearth of reassessment on nearby houses are exact examples of why there might be a differential in price.

Myth: The appraised value of a house will vary depending upon if the appraisal is provided for the buyer or the seller.

Fact: The appraiser has no vested interest in the outcome of the report and should render services with independence, objectivity and impartiality - no matter for whom the appraisal is conducted.

Myth: Any time market value is established, it should equate to the replacement cost of the house.

Fact: Without any pressure from any different parties to purchase or sell, market value is what a willing buyer would pay an interested seller for a particular house. Replacement value is the dollar amount needed to reconstruct a house in-kind.

Myth: Specific methods, such as the price per square foot, are the ways appraisers use to come to the worth of a property.

Fact: There are many varied ways that an appraiser will use to make an in-depth analysis of every factor in consideration of the property, such as the size, location, condition, how close it is to certain facilities and the value of recently sold comparable properties.

Myth: In a powerful economy - when the worth of properties in a given county are found to be increasing by a certain percentage - the costs of individual properties in the area can be expected to appreciate by that same percentage.

Fact: All appreciation of price is on a case-by-case basis, determined by data on relevant elements and the data of comparable houses. It makes no difference if the economy is powerful or on the decline.

Myth: Just looking at what the home looks like on the outside gives an idea of its worth.

Fact: There are a number of different factors that show property value; these factors include location, condition, improvements, amenities, and market trends. There's no real way to get all of this data from simply examining the property from the exterior.

Myth: Since you're the one providing the money for the appraisal when applying for the loan to purchase or refinance real estate, you own the ordered appraisal.

Fact: Legally, the report is owned by the lender unless the lender relinquishes their interest in the report. Home buyers have to be provided with a version of the report through request as per the Equal Credit Opportunity Act.

Myth: There's no reason for consumers to even concern themselves with what the appraisal contains so long as their lending institution is satisfied.

Fact: A consumer should definitely look through their report; there could be some questions or some concerns with the accuracy of the inspection that need to be addressed. Remember, this is probably the most expensive and important investment a consumer will ever make. Also, the appraisal makes a near perfect record for future reference, filled with useful and often-revealing data - including, but not limited to, the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the vicinity.